Kosdaq cancels IPO approval for cloud developer InnoGrid

The Kosdaq market under the Korea Exchange said on Wednesday it has canceled its preliminary approval for InnoGrid Co.’s initial public offering on the grounds that the cloud platform developer failed to include a significant risk factor that could be harmful to its investors in its prospectus.

In January of this year, InnoGrid got the nod for its IPO. It was supposed to go public on the junior Kosdaq market in March.

However, it hit a roadblock in the process of the Financial Supervisory Service (FSS) reviewing its prospectus.

The regulator said that InnoGrid had not mentioned the possibility of a legal dispute arising between the entity that had previously controlled the technology developer and the entity’s top shareholder over InnoGrid as an investment risk.

The company revised its prospectus seven times, as advised by the FSS.

InnoGrid had initially claimed that it did not regard the possible dispute over the company as an important matter.

On Wednesday, however, it announced the cancellation of its IPO, which marked South Korea's first case of withholding an IPO approval.

Under Kosdaq market rules, InnoGrid is not allowed to file for a preliminary IPO review for one year.

Founded in 2006, the company racked up 1 billion won ($724,375) in operating losses on sales of 32.9 billion won in 2023. Korea Investment & Securities managed the IPO process.

Write to Jeong-Cheol Bae at bjc@hankyung.com

Yeonhee Kim edited this article.